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Why cable companies aren’t scared of you dropping your pay TV service

June 4th, 2013 at 5:00 PM
Cable Cord Cutting Analysis

Cord cutting is a real phenomenon in terms of both paid television services and home broadband Internet services. But cable companies aren’t scared just yet because they figure that most consumers will rely on them for one or the other — in other words, they figure that someone who cuts the cord on their pay TV service will still want to have a home broadband connection and vice versa. AllThingsD reports on some new research conducted by analyst Craig Moffett showing that “cord-cutters who are dropping their cable TV subscriptions in favor of the Internet still need to get the Internet, and they’re probably getting that from the cable guys,” who in turn benefit because broadband service is a “strong, high-margin business.”

Of course, that doesn’t mean the cable industry has a worry-free future ahead of it. Moffett thinks that if users continue to use their Internet connections to watch video content then cable companies will make up for lost revenue by implementing metered broadband schemes where consumers pay for the amount of data they consume. This means that users who watch a lot of movies and shows over Netflix and Hulu would potentially see their monthly Internet bills skyrocket as cable providers slap them with higher rates to reflect their data consumption. This sort of metered broadband could seriously upset consumers, however, so it seems that the cable industry would be taking a risk by employing such a strategy.




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